The Lac Otelnuk Iron Project, located in Nunavik, Québec, is located
approximately 170 kilometres north of the town of Schefferville,
Québec. This town once served as a centre for the iron mining and
processing operations of the Iron Ore Company of Canada. The
northern terminus of the Quebec North Shore and Labrador Railroad,
a common carrier, is located in Schefferville. The property lies within
the Labrador Trough, one of the largest iron ore belts in the world,
which contains world-class iron deposits that have been continuously
mined since 1954.
The Lac Otelnuk iron deposit is a Lake Superior type banded iron
formation or taconite. The property was first explored in the early
1950s when a significant magnetite iron formation was mapped over
a strike length of approximately 25 kilometres. Exploration drilling
(36 holes) in the 1970s largely limited to the upper iron formation
unit, and geological and geophysical mapping resulted in historic
mineral resource estimates for two adjacent zones, the North and
South. Magnetite occurs throughout this iron formation, with the
North and South zones largely uniform in continuity of grade and
thickness. Subsequent metallurgical pilot plant testing at Lakefield
Research on a 21-tonne bulk sample indicated that the iron
formation is amenable to conventional magnetic separation
technology, yielding a good concentrate containing 68.5% iron with
a silica content of 3.5%, suitable for pelletizing.
The Lac Otelnuk deposit is similar to the taconite deposits of the
Mesabi Iron Range in northern Minnesota, where iron mining
occurred for over 100 years and continues to expand into the future.
The Lake Superior type iron formations are banded sedimentary rocks
composed of iron oxides, magnetite and hematite within chert.

Recent Activity, Work Programs and Going Forward

In 2012, the Company drilled 157 BQ delineation holes totaling
18,508 meters to expand and upgrade the Mineral Resource. An
additional 18 PQ holes totaling 1,957 meters were also drilled to
obtain a 33 tonne bulk sample for metallurgical testing. Since 2007,
Adriana and Lac Otelnuk Mining Ltd. have drilled a total of 392
diamond drill holes totaling 50,802 meters on the Lac Otelnuk
property.
The Lac Otelnuk iron formation is open along strike to the northwest
and southeast. It subcrops at surface and dips gently (from 2 to 5
degrees) to the northeast, eventually plunging under sedimentary
formations. The western extent is terminated by erosion. Due to the
gentle north-easterly dip and westerly sloping terrain, much of the
sedimentary rocks that overly the South Zone have been stripped
away by erosion, exposing the Upper Iron Formation.
The Company has also completed, the geotechnical drilling and test
pitting programs for the Tailings Management Facility, Process Plant,
Air Strip and borrow sources. In addition, the hydrogeological and
rock mechanical holes for the design of open pit have been
completed. An 80 tonne bulk sample was extracted and the pilot
plant testing is in progress.

The Company has completed the Feasibility Study and is looking forward to the development of the Lac Otelnuk Project!